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5. A machine used to cut and shape wood would be categorized as what type of input?
___ (A) 0
___ (B) 60,000
___ (C) 80,000
___ (D) 100,000
___ (E) 140,000
8. Refer to the graph above. If the Brureff Electronic Company was fully utilizing all of
its resources and wanted to change the quantity of computers produced from 30,000 to
40,000, the opportunity cost would be:
___ (A) Graph A is depicts an increasing cost production possibilities and Graph
B depicts a constant cost production possibilities.
___ (B) Graph A depicts a constant cost production possibilities and Graph B
depicts an increasing cost production possibilities
___ (C) Both graphs depict constant cost production possibilities.
___ (D) Both graphs depict increasing cost production possibilities
___ (E) On either graph only trucks have increasing cost production possibilities.
11. Given that haddock (a type of fish) is experiencing serious decline in its population
resulting from too many being taken by fisherman; and that chickens are not experiencing
a serious decline in population despite being slaughtered and brought to market in large
quantities.
Which of the following gives the best economic explanation of the flocks of chicken and
the depletion of schools of haddock?
13. If you stoop to pick up a dime on the sidewalk, then an economist would conclude
that:
___ (A) You are in desperate need of a dime.
___ (B) You are unemployed.
___ (C) Your marginal cost of picking up the dime exceeded your marginal
benefit.
___ (D) Your marginal benefit of picking up the dime exceeded or equaled your
marginal cost.
___ (E) Your marginal benefit equaled but did not exceed your marginal cost.
16. Given the information in the table of production choices for the Brown Farm located
above, we can conclude that the Brown Farm is experiencing
18. Refer to the production possibilities graph for the FR TEXTILE Co. The company is
efficiently using all of its factors of production and decides to increase production of
shirts from 2,000 to 5,000. In order to do this without additional factors and with the
present technology the firm will have to forego:
___ (A) 10,000 pairs of pants
___ (B) 2,000 pairs of pants
___ (C) 5,000 pairs of pants
___ (D) 3,000 pairs of pants
___ (E) 2,000 shirts
19. Given the ppc graph for computers and HD TV's, increasing production from point A
to point B would
___ (A) not have an opportunity cost of foregone goods because the firm has
increased its technology.
___ (B) not have an opportunity cost of foregone goods because the firm is not
using all of its available resources at point B.
___ (C) not have an opportunity cost of foregone goods because the firm is not
using all of its resources at point A.
___ (D) not have an opportunity cost of foregone goods because the firm is
outside its production possibilities curve.
___ (E) There is an opportunity cost of foregone computers but it cannot be
determined.
20. Refer to the PPC graph for computers and HD tv.s. Which of the following statements
gives the most accurate description of how production at level E could occur in the
future?
___ (A) An increase in the technology for producing computers is developed.
24. Refer to Table B for the Brown Farm. Which of the following statements is always
true given the information in this table?
___ (A) Refland has the absolute advantage in the production of soy and alfalfa.
___ (B) Bruland can produce an equal amount of Soy as does Refland but with
fewer resources.
___ (C) Bruland has the absolute advantage in the production of soy.
___ (D) Bruland has the absolute advantage in the production of alfalfa.
___ (E) Refland has the absolute advantage in the production of alfalfa.
___ (A) Refland has the comparative advantage in the production of soy.
___ (B) Bruland has the comparative advantage in the production of soy.
___ (C) Neither country has the comparative advantage in the production of soy
___ (D) Neither country has the comparative advantage in the production of
alfalfa.
___ (E) Bruland has the comparative advantage in the production of alfalfa
27. Refer to the PPC graph of Refland and Bruland.
Bruland's opportunity cost of producing a ton alfalfa is
___ (A) to forego 8 tons of soy.
___ (B) to forego 8 tons of soy.
___ (C) to forego 4 tons of soy.
___ (D) to forego 1/4 ton of soy.
___ (E) to forego 2 tons of soy.
___ (A) Farmer Reff should specialize in the production of wheat and farmer Bru
in the production of corn.
___ (B) Farmer Bru should specialize in the production of wheat and Farmer Reff
in the production of corn.
___ (C) Neither farmer should produce wheat since neither has the comparative
advantage in the production of wheat.
___ (D) There is no way that either farmer could benefit from trade.
___ (E) Both farmers are experiencing increasing cost in the production of corn.
___ (A) Both have the comparative advantage in the production of corn.
___ (B) Neither one has the comparative advantage in the production of corn.
___ (C) Bru has the comparative advantage in the production of corn.
___ (D) Reff has the comparative advantage in the production of corn.
___ (E) The farmer that foregoes the most wheat.
38. Which of the following is most likely to be Sally's opportunity cost for getting to
school on time this morning?
___ (A) The A she gets on the exam period 1.
___ (B) The detention she avoids by being on time.
___ (C) The extra half hour of sleep she would have had if she were late.
___ (D) The jealous comments by classmates who only got a D on the exam
period 1.
___ (E) The satisfaction of doing the right thing.
39. The reason money is needed for a business start-up is:
40. Assume that there are two countries, Eden and Paradise that have potential for trade.
Both countries can produce widgets or gadgets. Each country should specialize in the
product that: